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Sistan derives its name from Sakastan which, on its part, derives from the name of the Saka tribes. The Saka (known as Scythians in Greek sources) began to settle in this region during the Parthian era.

The more ancient Old Persian name of the region - prior to Saka dominance - was zaranka ("waterland"; cf. Pashtodzaranda). This older form is also the root of the name Zaranj, capital of the Afghan Nimruz Province.

In the Shahnameh, Sistan is also referred to as Zabulistan, after Zabol, a city in the eastern part of Iran. In Ferdowsi's epic, Zabulistan is in turn described to be the homeland of the mythological hero Rostam.

After the mid 2nd century BC, much of the Indo-Greek Kingdom was overrun by tribes known as the Indo-Scythians or Saka, from which Sistan (from Sakastan) eventually derived its name. The Indo-Scythians were defeated around 100 BC by the Parthian Empire, which briefly lost the region to its Suren vassals (the Indo-Parthian) around 20 AD, before the region was conquered by the Kushan Empire in the mid 1st century AD. The Kushans were defeated by the Sassanid Persian Empire in the mid 3rd century, first becoming part of a vassal Kushansha state, before being overrun by the Hephthalites in the mid 5th century. Sassanid armies reconquered Sistan in by 565 AD, but lost the area to the Arab Rashidun Caliphate after the mid 640s.

Sistan was invaded and conquered by expeditions from Kirman. The Muslim conquest of Sistan began in AH 23 (643/644 AD) when Asim bin Amr and Abdullah bin Umar made an incursion and seized Zarang. The Sistanis concluded a treaty with the Muslims, to the effect that they should pay Kharaj. The commander of a Muslim army camped in Kirman Abd Allah B Amir sent Al Rabi B Ziyad (In Tarikh i Sistan it is Al Ziyalap-28) al Hinithi to Sistan . Rabi crossed that desert between Kirman and that province ie Sistan and reached Zaliq, a fortress between five farsangs of the Sistan frontier whose dihaqan surrendered to him . Rabi reduced two other localities (or the fortress) of Karkuya (mention of whose Fire Temple in the song of the Fire of Karakuya has come down to us in the annoymously written Tarikh i Sistan and Heisum) without bloodshed. Falling back on Zaliq, Rabi projected the seizure of Zaranj of which though formerly it had submitted to the Muslims had once more to be subdued. Between Zaliq and Zarang, some minor localities like Zught, Nasrudh and Sherwadh were taken with much fighting.

The Marzban of Zaranj Aparwez who commanded at Zaranj strongly contested the advance of Rabi, but at last was obliged to surrender it to the Muslims. It is said that when Aparwez appeared before Rabi to discuss terms, he found the Arab general sitting on the corpse of a dead soldier .[2]

Sistan became a province of the Umayyad and Abbasid Caliphates. In the 860s, the Saffarid dynasty emerged in Sistan and proceeded to conquer most of the Islamic East, until it was checked by the Samanids in 900. After the Samanids took the province from the Saffarids, it briefly returned to Abbasid control, but in 917 the governor Abu Yazid Khalid made himself independent. He was followed by a series of emirs with brief reigns until 923, when Ahmad ibn Muhammad restored Saffarid rule in Sistan. After his death in 963, Sistan was ruled by his son Khalaf ibn Ahmad until 1002, when Mahmud of Ghazni invaded Sistan, ending the Saffarid dynasty.

A year later, Sistan revolted. In response, Mahmud brought an army to suppress the revolt. Mahmud's Hindu troops sacked the mosque of Zarang massacring the Muslims inside.[3]

In 1029, Tadj al-Din I Abu l-Fadl Nasr founded Nasrid dynasty, a branch of Saffarids as melik of Sistan for Ghaznavids. The dynasty became vassals of Seljuks in 1048, Ghurids in 1162, Khwarezmshahs in 1212. Mongols sacked Sistan in 1222 and Nasrid dynasty was ended by Khwarezmshahs in 1225.

In 1236, Shams al-Din 'Ali ibn Mas'ud founded Mihrabanid dynasty, another branch of Saffarids, as melik of Sistan for Ilkhanate. Mihrabanid contested with Kartids during Mongol rule. Sistan declared independence in 1335 after demise of Ilkhanate. 1383 Tamerlane conquered Sistan and forced Mihrabanids to become vassals. Overlordship of Timurids was ended in 1507 due to Uzbek invasion in 1507. Uzbeks were driven in 1510 and Mihrabanids became vassals of Safavids until 1537 Safavids deposed the dynasty and gained full control of Sistan.

Safavid rule was lasted till 1717 except Uzbeks rule between 1524 and 1528 and 1578 and 1598. In this year Hotaki dynasty conquered it. Nadir Shah reconquered in 1727. After assassination of Nadir Shah, Sistan under rule of Durrani Empire in 1747. Between 1747 and 1872 Sistan was contested with Persia and Afghanistan. The border dispute between Persia and Afghanistan was solved by Sistan Boundary Mission, led by General Sir Frederick Goldsmid, who agreed to most of Sistan in Persia but the Persians won the withdrawal of the right bank of the Helmand. The countries were not satisfied.

The border was defined more precisely with the Second Sistan Boundary Commission (1903-1905) headed by Col. Arthur Mac Mahon (later Sir), who had a difficult task due to lack of natural boundaries. The part assigned Persia was included in the province of Balochistan (which took the name of Sistan and Baluchistan and Sistan and Baluchistan in the 1986) being the capital Zahedan. In Afghanistan he was part of the Sistan province of Farah-Chakansur that was secreted in the administrative reorganization of 1964 to form the province of Nimruz with capital Zaranj.

Sistan has a very strong connection with Zoroastrianism and during Sassanid times Lake Hamun was one of two pilgrimage sites for followers of that religion. In Zoroastrian tradition, the lake is the keeper of Zoroaster's seed and just before the final renovation of the world, three maidens will enter the lake, each then giving birth to the saoshyans who will be the saviours of mankind at the final renovation of the world.

The most famous archaeological sites in Sistan are Shahr-e Sukhteh and the site on Kuh-e Khwajeh, a hill rising up as an island in the middle of Lake Hamun.